投稿者: ワールド ソルーションズ

Excerpt: Weak yen is Japan’s best bet for growth (January 5, 2015) | Prof David Weinstein (@columbia_econ) @NAR（English）

This is a tough time to be a proponent of tax increases in Japan. In 1997, after a very successful fiscal stimulus, Japan raised taxes, and the economy was thrown into a major recession. In April 2014, Japan raised taxes again and converted a weak recovery into a serious recession.
Surprisingly, some people called for yet another tax increase, but, wisely, Prime Minister Shinzo Abe chose to postpone that decision. To those who criticize him for being inconsistent, Abe could easily employ John Maynard Keynes’ famous retort: “When I find new information, I change my mind; what do you do?”
… two questions remain unanswered: Why is it that Japanese tax increases are associated with such negative economic performance, and how is Abenomics going to pull Japan out of a seemingly inevitable fiscal crisis? …

First, on the fiscal level, I have long argued that we need to work with the right numbers. On the face of it, the problem looks terrifying. The flow of funds data reveals that Japan’s gross government debt stands at 1.177 quadrillion yen ($9.79 trillion), or about 243% of gross domestic product. That number isn’t very useful for understanding the problem for two reasons.
〔cf. https://www.mof.go.jp/tax_policy/summary/condition/007.htm〕
– First, the Japanese government holds many of the Japanese government bonds that it issues, so there is substantial double counting of liabilities. Just as one should value a company by looking at its net worth, only a government’s net debt (debt minus assets) is an economically meaningful concept of its current fiscal situation.
– Second, the assets and liabilities of Japan’s public corporations should be included in the overall consolidated government balance sheet, just as a company’s subsidiaries should be included in its consolidated balance sheet. When we calculate the consolidated balance sheet for the government, we find that total government net debt stood at 132% of GDP in June of 2014. *People who pay attention to these figures will note that this number is about 20 percentage points lower than the net debt number reported by the International Monetary Fund. The reason is that most countries don’t report as detailed flow of funds data, so the IMF is forced to rely on narrower, and less accurate, information in order to make international comparisons with less-developed countries. However, because Japan does collect good data, it makes sense to use it and discuss the issue with the right information.

… Since the central bank could, in principle, forever hold its current stock of JGBs, the government need not worry about how it is going to repay these bonds. If we consolidate the BOJ’s balance sheet with that of the government, we find that the net liabilities of the government stood at only 80% of GDP in June of 2014: one-third the gross-debt number.
In other words, the government has a lot of assets to cover its liabilities, so in the event of a crisis, it wouldn’t need to finance anything close to the official gross or net debt numbers. This doesn’t mean there can’t be a crisis. …

As these numbers make clear, Japan’s problem is not the current level of debt but the future path of government expenditures. Certainly, many have claimed that Japan has shifted toward a path of debt growth that is not sustainable.
… Back in 2004, @christianbroda3 (@NYFedResearch) and I wrote a paper, “Happy News from the Dismal Science: Reassessing Japanese Fiscal Policy and Sustainability,” in which we forecast what Japanese government net liabilities would be in 2015 if the country’s fiscal policy was sustainable. We forecast that the net liabilities in 2015 would be 84% of GDP, which is right on track given the 80% number for June 2014.
… Some, like promoting women’s advancement opportunities, loosening immigration restrictions, and pushing forward with trade liberalization are likely to raise incomes in the long run. However, the effectiveness of these reforms is measured in years, if not decades. This doesn’t mean they shouldn’t be done — about 20% of U.S. productivity growth can be attributed to the country’s progress in reducing gender and racial inequality — but …

If structural reform is unlikely to produce changes in the near term and fiscal policy is likely to remain restrained, we need to think about whether monetary policy can actually boost Japanese growth. Here, I remain optimistic. …
Historically, we’ve seen that large devaluations are one of the most effective means of ending deflationary episodes. Indeed, many of the problems of Southern Europe would go away if only those countries could devalue their currencies. …